The Lebanese government named asset manager Karim Souaid as central bank governor on Thursday, official media reported, a post crucial to implementing economic reforms demanded by international creditors.
He was appointed despite the reservations of the new, reformist prime minister, Nawaf Salam, who called on Souaid to commit to the government’s reform agenda in a country gripped by a five-year economic collapse widely blamed on official mismanagement and corruption.
“The cabinet appointed Karim Souaid as central bank governor,” the official National News Agency reported.
The post had been without a permanent occupant since July 2023, when the embattled Riad Salameh left office without a successor.
Salameh, who served as governor for three decades, was arrested in September on multiple charges including embezzlement and money laundering.
Lebanon’s divided politicians had until now failed to agree on a permanent replacement.
Souaid is the founder and managing partner at Gulf-based Growthgate, according to his biography on the private investment firm’s website.
It says he previously worked at major banks including HSBC and has been involved in privatisation initiatives in a number of Arab countries.
Some Lebanese media reported that Souaid was close to the banking sector and members of the political elite.
Salam said he had “reservations” about Souaid’s appointment but did not give specifics except to cite his “desire to protect depositors’ rights and preserve the state’s assets”.
He said Souaid “must adhere, from today, to the financial policy of our reformist government… on negotiating a new programme with the International Monetary Fund, restructuring the banks, and presenting a comprehensive plan” to preserve depositors’ rights.
Diana Menhem, of the pro-reform NGO Kulluna Irada, said Souaid had shown “alarming indicators” in wanting to slash deposits and transfer “a huge unsustainable financial burden” of debt onto the state.
She called for fair compensation for depositors and said he would be judged on negotiating a deal with the IMF, transparency and curbing the illicit economy.
Poverty
Lebanon’s new authorities need to carry out reforms demanded by the international creditors to unlock bailout funds.
The economic crash since 2019 has seen the Lebanese pound lose most of its value against the US dollar and pushed much of the population into poverty, with ordinary people locked out of their savings.
Salam said the cabinet had also approved “a draft law aiming to modify legislation on banking secrecy”.
In April 2022, Lebanon and the IMF reached a conditional agreement on a $3-billion-dollar loan package, but painful reforms that the 46-month financing programme would require have not been undertaken.
Earlier this month, the IMF welcomed the new Lebanese government’s request for support in addressing the country’s severe economic challenges.
In February, it said it was open to a new loan agreement with the country following discussions with its recently appointed finance minister.
Beirut-based think tank the Policy Initiative said in a statement on Wednesday that the nomination of a new central bank chief would “test the new government’s commitment to genuine reform”.
Souaid studied law at Lebanon’s St Joseph University and at Harvard Law School in the United States, according to his biography, and is a member of the New York State Bar Association, it says.
